Good Faith Estimate - Kentucky

4 Replies

Hello.  I'm considering a purchase of a commercial warehouse in Louisville, KY for $320k.  This would be a first investment purchase and it would be through a partnership with 2 other partners.  I'm trying to run some numbers, but need an idea of total cash we would need as well as a current interest rate.  

Also, we'll need to know what down payment is required for this purchase.  We'll look to finance over 30 years.  

Can someone help me out with a good faith estimate?

Thank you in advance.

Good faith is usually 1% commercial downpayment is between 20-25%
Commercial lending is usually done on 10 or 20 year loan w 30yr amortization.

Ok, this may be a silly queston, but how does a 20yr loan with a 30yr amoritization work?   

@Micah Mcarthur

The loan payment is calculated as if after 30 years of payments the loan will be paid in full,  hence 30 year amortization . However, the bank wants the loan due in 20 years. You as the borrower get a lower monthly payment based upon the 30 yr amortization but have to payoff the loan balance at year 20, or refinance at that point. 


Far more options to finance commercial.  We all know it differs from residential, a totally different animal because 1) each commercial asset classes varies greatly. Parking lot vs. multifamily vs. office towner, different asset class means a different lending requirement because the collateral operates and cash flows differently 

2) The lender considers the end user- an owner, a tenant, a spec build or whatever 

3) Private lending, hard money lending is the seller holding any paper? (owner financing), if yes, then what's the note terms?

4) How is the partnership organized? I'm assuming an entity but is there an operating agreement? personal recourse? a lender wants to see this. 

5) What kind of lender are we talking? local bank that services their own portfolio? Large national that has their own guidelines. While we are at it, it the property eligible for tax credits or incentives? 

All these are factors for lending approval that will determine rate and terms of a loan. 

I'm a commercial agent and working on several warehouse deals in the urban core of Louisville. Unlike retail, office the industrial asset ranges SIGNIFICANTLY. There are dozens on considerations from zoning to interstate access just to mention 2 biggies. 

However,  it can be a great investment if you make smart choices. 

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